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The decision is likely to spark concern among foreign investors and could cast a shadow over the future of hostile takeover bids in the world’s third-largest economy.
Asia Development Capital (ADC), which built up a 40% stake in Tokyo Kikai Seisakusho in a matter of weeks to become its largest shareholder, had sought to stop the manufacturer of newspaper printing presses from issuing a poison pill.
Shareholders in Tokyo Kikai, excluding ADC, had approved an issuance of new shares that would dilute the fund’s stake and prevent it from mounting a takeover.
ADC had already sought to block the share issue, but had that request for an injuction rejected by a lower court. It then appealed to the Tokyo High Court, which rejected it on Tuesday.
A victory for Tokyo Kikai holds the potential to make it much easier for other Japanese companies to use poison pills.
